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The Weekly Natural Gas Market Newsletter May 2, 2022

The Weekly Natural Gas Market Newsletter

May 2, 2022

Natural Gas News & Notes

For the week ending 4/29, the now prompt June 2022 NYMEX natural gas futures contract settled $.581 higher at $7.244. The June contract traded in a $1.054 range on the week posting a weekly high of $7.524 and a low of $6.471. This week, the May 2022 contract expired on Wednesday at $7.267. The May contract took over as the prompt month contract in late March and gained $1.94 (27%) in value before expiration.

For the week ending 4/22, the EIA reported an injection of 40 BCF into storage. The market had been expecting an injection of 38 BCF. Storage inventories now stand at 1,490 BCF which is 21.4% below year ago levels and 17% below the previous 5-year average. Expectations for the week ending 4/29 is that the weekly storage report will show an injection around 72 BCF.

For the month of April, feedgas demand for LNG exports has averaged 12.2 BCF/day. This is down slightly from the March average of 12.7 BCF/day. The Calcasieu Pass facility officially became the 7th LNG export facility to enter commercial service. The facility is currently receiving about .8 BCF/day of feedgas for its operations of 6 liquefaction blocks. Expectations are that the facility will receive FERC approval later in 2022 to fully commission the remaining 3 liquidation blocks and bring the facility's daily feedgas demand to the 1.6 BCF/day range. This increase in demand and peak export capacity from the other active LNG export plants should see daily feedgas demand rise to almost 14 BCF/day.

The natural gas market appears to finally be in a period of consolidation. The market rocketed up to a fresh 14 year high of over $8.00 in mid-April before dropping to the mid $6.00 range for a very brief time. This move corrected a technically overbought situation and has allowed the market to somewhat stabilize as it eyes its next move. Given the bullish fundamental nature of the market landscape, it's fully expected that the market will yet again look to test and probably break above the $8.00 level again soon.